Exploring Innovation in Daily Life: A Journey through the World of Decisions
Hello, everyone. I hope you are well and innovating a little more each day. Today I bring a text about innovation in different forms and contexts. Needless to say, what is presented here is not “the whole” but a bit of what I would like to share with you on the subject.
Innovation has become one of those phrases that everyone loves to use but few actually understand, as we constantly say in this newsletter. It is simple to become engrossed in the “hype” and cacophony of this industry, believing that innovation consists of following the next great, game-changing concept. True innovation, on the other hand, can be far more intricate and occurs in the day-to-day operations of a business. It’s a methodical process that calls for imagination, planning, information, and a comprehension of what constitutes long-term sustainable change (Kahn, 2018).
Thus, we will explore how different types of innovation apply to these various environments, offering insights into how these strategies can provide competitive advantages. First, it is essential to say that innovation can occur in different areas and in different ways. In the contemporary business scenario, it must be part of the daily routine of organizations seeking growth, whether small or large. The speed of technological changes and globalization imposes constant pressure on companies to innovate and quickly adapt to new social and market conditions. Therefore, innovation can happen in organizational processes, products, organizational structure, as well as in marketing and delivered services.
On another occasion, we will talk about these types of innovation. In this post we want to understand the relationship with how these innovations happen and the characteristics of how each company puts them into practice. Joseph Schumpeter (1939) established several different categories for innovation. Incremental innovation is the process of continuously making small modifications to already-existing products and procedures with the goal of efficiency and progressive improvement. Conversely, radical innovation indicates significant adjustments that result in new products or technologies that completely shift markets. Disruptive innovation is a term coined by Clayton Christensen (1997) to describe how low-performing, initially basic innovations can grow to threaten and finally exceed more established technology. These categories make it easier to comprehend how various innovation techniques might be used in different situations to gain a competitive advantage.
Let’s bring some concepts and examples of when and how innovation happens in different contexts:
Incremental Innovation: Refining Efficiency
Incremental innovation is frequently the most realistic strategy in huge organizations. This type of innovation entails a number of small adjustments or enhancements to the goods, services, and procedures that are already in use. While they can seem like small adjustments, they are crucial to preserving operational effectiveness and competitiveness. Schumpeter (1939) emphasized the importance of these ongoing advances as a typical path of technical advancement. Better product quality, more effective operations, or the introduction of new, fairly priced technologies in a corporate setting could all be examples of these advances.
Example: Toyota is known for its continuous improvement approach, “kaizen,” which translates into small, constant improvements in its production processes, resulting in high efficiency and quality.
Radical Innovation: Transforming Markets
A lot of organizations, especially small and medium-sized ones, may be able to stand out in a competitive market by embracing radical innovation. This type of innovation requires major modifications that completely change the way products and services are offered. Radical innovation has the power to entirely transform markets and create entirely new product categories, claims Clayton Christensen (2015). For example, by developing a unique, tasty gluten-free bread, a bakery can reposition itself in the market, attract new customers, and differentiate itself from competitors.
Example: Tesla revolutionized the automotive market with its electric cars, offering a viable and attractive alternative to traditional combustion vehicles, significantly altering the global automotive market.
Disruptive Innovation: Challenging the Status Quo
Using disruptive innovation to make a significant impact is a very effective strategy. As per the disruptive innovation theory put forth by Christensen (1997), small enterprises or initiatives have the potential to challenge established market players by providing inferior products or services that eventually attain market dominance. Therefore, even if you are an NGO or institution, implementing digital technology-based educational programs in underprivileged communities, for example, may seem like a simple solution at first, but it has the potential to fundamentally shift the way that education is taught and create new opportunities for learning and resources.
Example: The emergence of Khan Academy transformed education by offering free, accessible educational content globally, challenging traditional teaching models and making learning more accessible.
Frugal Innovation: Simple and Effective Solutions
Frugal innovation, also known as “jugaad” in India, is the creation of simple, effective, and low-cost solutions, frequently in reaction to bad conditions. This kind of innovation is essential for NGOs to maximize effect with limited resources. Creating value with few resources is the main goal of frugal innovation, which frequently involves finding innovative and effective ways to reuse materials and pre-existing technologies.
Example: The creation of the portable ECG by GE Healthcare in India is a classic example of frugal innovation. The device is affordable and easy to use, allowing cardiac diagnostics in remote areas with limited access to advanced medical infrastructure.
Strategic Positioning
Each of these innovation approaches can be studied using theoretical models to better understand the strategic positioning of innovation initiatives. As a result, understanding and adapting them to your company’s setting is the most crucial action.
Innovating is a constant process that necessitates a thorough understanding of many types of innovation and how they can be implemented in a variety of settings. Whether through gradual, radical, disruptive, or inexpensive innovation, the goal is to tailor these tactics to each organization’s individual needs. Integrating these concepts with a strategic and collaborative vision allows you to not only gain a competitive edge, but also have a good and long-term impact on the market and society.
Exploring these various innovation paths enables us to picture a future in which firms can adapt and grow in a constantly changing environment while remaining relevant and competitive.
I sincerely hope you found this week’s text enjoyable, and I would be delighted to hear your thoughts. Until we meet again;)
References
- CHRISTENSEN, C. M. The Innovator’s Dilemma: When New Technologies Cause Great Firms to Fail. Boston: Harvard Business School Press, 1997.
- CHRISTENSEN, C. M. What is disruptive innovation? Harvard Business Review, v. 93, p. 44–53, 2015.
- SCHUMPETER, J. Business cycles: a theoretical, historical and statistical analysis of the capitalist process. New York: McGraw-Hill, 1939.
- CHESBROUGH, H. W. Open Innovation: The New Imperative for Creating and Profiting from Technology. Boston: Harvard Business School Press, 2003.
- KEELEY, Larry et al. Ten Types of Innovation: The Discipline of Building Breakthroughs. Hoboken: John Wiley & Sons, 2013.
